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Investing.com -- In the competitive landscape of Internet SMid Cap stocks, UBS has identified several standout performers that merit investor attention. Despite market volatility, these companies have demonstrated resilience and growth potential that positions them favorably within their sector.
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The following rankings highlight the top performers in the Internet SMid Cap space according to UBS analysis:
AppLovin continues to generate strong interest among investors following its better-than-feared Q4 revenue guidance. While enthusiasm has been somewhat tempered by an apparently smaller contribution from web-based advertising in Q4 (approximately $250 million), long-term projections remain robust.
UBS notes that fiscal year 2026 total revenue estimates remain largely unchanged at around $8 billion, as investors balance a stronger-than-expected gaming environment against lower web-based revenue forecasts. The positive sentiment surrounding APP reflects confidence in its underlying business fundamentals despite some sectoral headwinds.
In recent news, AppLovin reported strong third-quarter 2025 results, with revenue growing 68% year-over-year to $1.405 billion. Following its strong operating performance, Fitch Ratings also upgraded the company’s Long-Term Issuer Default Rating to ’BBB’.
Compass has seen UBS increase its FY26 EBITDA estimate by 8%, reflecting strong performance flow-through from top-line growth (with FY26 revenue estimates up 2%) and accelerated implementation of cost-saving initiatives.
The positive EBITDA revision primarily stems from lower Customer & Operations expenses versus non-GAAP operating expense adjustments. Regarding the potential Compass-HOUS deal, though not factored into current projections, cost synergy estimates have already been revised upward from $225 million to over $300 million, suggesting additional upside potential.
Compass recently reported robust financial results for the third quarter of 2025, with revenue reaching $1.85 billion, a 23.6% year-over-year increase, and adjusted EBITDA hitting a record $93.6 million.
Zillow Group projects "mid-teens growth" for FY26 revenue, maintaining its FY24/FY25 growth trajectory even if housing market conditions continue to "bounce along the bottom." UBS anticipates the For Sale segment will contribute approximately 7 percentage points to total revenue growth next year, while Rentals will add about 6 percentage points, compared to their respective 6 and 7 percentage point contributions in FY25.
Growth opportunities exist through increased Enhanced Markets connects penetration (currently 34% in Q3 2025 versus an internal target of 75%), continued Showcase adoption (reaching 3.2% of listings in Q3 versus an internal target of 5-10%), and deeper integrations with Follow Up Boss and Zillow Pro.
Zillow Group announced third-quarter results that exceeded expectations, with revenue of $676 million and EBITDA of $165 million. Following the report, Goldman Sachs raised its price target on the company, while several other firms, including Benchmark and Bernstein, reiterated positive ratings.
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